IMF Retains India's GDP Growth Forecast At 6.5% For FY26, FY27
The International Monetary Fund, in its World Economic Outlook report released on Friday, has retained India's gross domestic product growth forecast at 6.5% for fiscal 2026 and fiscal 2027.
The forecast is the same as "projected in October and in line with potential", the report stated.
For the ongoing fiscal, however, IMF has lowered India's GDP growth forecast to 6.5%. This is 50 basis points lower as compared to the forecast of 7% growth issued in October.
Notably, India's economic growth has lost some pace after soaring to as high as 8.4% in fiscal 2024. The country remains the "world's fastest growing economy"—as underlined by the World Bank on Thursday—but logged slower GDP growths of 6.7% and 5.4% in the first and second quarters, respectively, of fiscal 2025.
The second quarter growth was the slowest in nearly the last two years, and was followed by India's National Statistical Office lowering the fiscal 2025 growth forecast to 6.4%.
According to IMF, the growth in India "slowed more than expected, led by a sharper-than-expected deceleration in industrial activity."
A day earlier, the World Bank in its flagship Global Economic Prospects report also retained India's GDP growth forecast at 6.7% in fiscal 2026 and fiscal 2027.
Global GDP Growth Outlook
"Global growth is projected at 3.3% both in 2025 and 2026, below the historical (2000–19) average of 3.7%," IMF's World Economic Outlook report stated. The forecast is unchanged as compared to that released in October.
The global GDP growth in the July-September quarter, however, slipped 0.1 percentage point below the forecast released in October, IMF said. Thus was driven by disappointing "data releases" in some Asian and European economies, it added.
The reported pointed towards the slower growth in China—at 4.7% in year-over-year terms in the third quarter of calendar year 2024—which was "below expectations".
China's faster-than-expected net export growth "only partly offset a faster-than-expected slowdown" in consumption amid delayed stabilisation in the property market and persistently low consumer confidence, it added.
A slowdown was witnessed in India as well during this period, led by a sharper-than-expected deceleration in industrial activity, IMF noted. In Japan, output contracted mildly owing to temporary supply disruptions, it said.
"By contrast, momentum in the United States remained robust, with the economy expanding at a rate of 2.7% in year-over-year terms in the third quarter, powered by strong consumption," the report said.
Meanwhile, the global headline inflation is expected to decline to 4.2% in 2025 and to 3.5% in 2026, "converging back to target earlier in advanced economies" than in emerging market and developing economies, IMF stated.
-
A New Samvat Wishlist: Inclusive Prosperity And Human Development
India has strengthened its economic foundations through infrastructure, digital access and enterprise. Its next growth chapter must deepen productivity, create better livelihoods and widen participation in prosperity.
-
Love, Sex Aur Dhokha: The Audacious Plot To Spy On Jensen Huang
A Taipei dinner, a Singapore chip buyer and a suspected Chinese asset: inside the alleged spy operation that got close to NVIDIA's Jensen Huang.
-
Ten Things I Learnt This Samvat
Patience can be a trap. Cheap stocks can stay cheap. Leverage can wipe you out. What did Samvat 2082 teach us? Niraj Shah writes on 10 lessons from the year gone by.
-
Talking Points This Week: Tech Nerves, FII Buying, And A Faraway Banking Shock
The global markets are not shining this Diwali. The exception in the large markets is, India.
-
Midterm Rally Lasted A Day. The Hard Reality Of A Divided US May Last Two Years | Opinion
Between a contested AI boom, a debt ceiling that arrives in 2027 and a president with every incentive to act alone, the next two years may prove more volatile than the first day's rally suggests.
-
Blue Wave Will Derail the AI Trade but Won't Dismantle the AI Era | Unhedged Position
The Democrats' sweep of the US Congress will see politics collide with economic forces both over the long and short term.
-
It's Time To Take The GST Council's Bet On Trust Global
Payment records can prove India's services exports, and clear, proportionate rules can bring foreign digital sellers into the tax net.
-
Opinion | India at 38: From Innovation Overperformer to Innovation Powerhouse
India now has 453 VC-backed deep science startups, 18 of them late-stage, after 117 percent growth since 2020. Laurus Labs, at USD 9.3 billion, is the most valuable deep science company in any middle-income economy outside China.
-
Navigating Energy Crossroads: S Jaishankar's Call For Diversified Supply Chains At G20 Ministerial Meeting
As geopolitical fault lines continue to test maritime trade routes and commodity flows, Jaishankar's message remains pertinent: true economic resilience requires open markets, protected transit lines, and a genuine commitment to multilateral cooperation rather than coercion.
